24
Jan
09

Dose China Own Us

Currently we have a large (and growing larger) of debt to pay China in the coming years and this could present enormous problems, other than just imposing an additional burden on our economy.

At the end of World War II Britain had rather a large debt to pay back to us and which we took full advantage of, in finding a permanent home for the current State of Israel.  Basically we pressured the British government into dividing Palestine into various regions, with one of the region’s going to the current country of Israel.  We did this through relaxing interest rates on the principal of the money owned to us if Britain would settle the Jewish homeland concern.  Of course the British did, thus part of the problem existing today in the Middle East.

Being an American I feel I’m justified in saying our government dose not always play fair with our friends when it comes to debt.  The aforementioned past policy is well documented, but seldom discussed in American textbooks.

Today, we must ask ourselves “why wouldn’t China do the same if push came to shove.”  For example; Taiwan, suppose China placed pressure on us to giving up our military and economical support to this nation, similarly as we did with the British some sixty years ago.  Seriously I doubt they would do such a thing, but there are other concerns, which could likely happen.

Technology is one; today we’re basically trading microchips for toasters with the Chinese, there demands could become more sophisticated requiring technology we use in our national defense systems or perhaps more realistic, technology our private industry uses here at home.  Imagine giving up KFC’s secret receipt for fried chicken or the formula for Coke.  It could happen!

Recently during the confirmation hearings for Timothy Geithner, Mr. Geithner made a brief statement, which worries me when he said “President Barack Obama believes Beijing is “manipulating” its currency.”

Could China be firing a warning shot or two?  Every country is suffering with their economy, but the Chinese yuan is fairly strong and any manipulating of its worldly value could have traumatic results on all international markets.

Yesterday the AP Online News Service published a story on this issue and it bears some careful thinking on how much debt we own China.  Here are some excerpts from the article:

Under Obama, US-China ties may face shaky start

By FOSTER KLUG
Associated Press Writer
Jan 24, 4:07 AM EST

Obama’s choice to lead the Treasury Department, Timothy Geithner, wrote that Obama believes China is “manipulating” its currency, which American manufacturers say Beijing does to make its goods cheaper for U.S. consumers and American products more expensive in China.

The United States often criticizes China about human rights and trade abuses, but Washington and Beijing find themselves increasingly intertwined in a host of crucial economic, military and diplomatic efforts.

Trade ties between the United States and China often are tense. China says it has made progress on currency changes and worries about bills introduced in Congress that would impose economic sanctions on China unless it moves more quickly to let its currency rise in value against the dollar.

Although Geithner said China is “manipulating its currency,” he suggested Thursday that now might not be the right time to brand Beijing as a currency manipulator under U.S. trade law, which could lead to U.S. trade sanctions against imports from China.

The following video, produced a year ago renders a little more insight to the potential problems we have between our two economies.

Update 20 Feb 09:

U.S.-China Trade Ties Erode Amid Accusations
from Wash Post – World News by Ariana Eunjung Cha
BEIJING — The global financial crisis is bringing out the worst in the trade relationship between the United States and China.

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